Instrumental Philanthropy, Nonprofit Theory, and Information Costs

Mitchell George E. () and Calabrese Thad D. ()
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Mitchell George E.: Austin W. Marxe School of Public and International Affairs, Baruch College, New York, NY, USA
Calabrese Thad D.: Robert F. Wagner Graduate School of Public Service, New York University, New York, NY USA

Nonprofit Policy Forum, 2020, vol. 11, issue 2, 15

Abstract: Instrumental philanthropy has gained attention and popularity in recent decades as an approach to maximizing the impact of giving. This article evaluates the suitability of the nonprofit institutional form, specifically the US public charity, as a vehicle for instrumental philanthropy. The analysis identifies an incongruity between the informational requirements of instrumental philanthropy and the form and theory of the nonprofit. An alternative theory of licensure is proposed to illustrate the difficulty of the information problem. Analysis suggests that the viability of instrumental philanthropy hinges upon information costs. Several public policy options are considered as means of better supporting instrumental philanthropy, presuming that allocative efficiency in the production of public benefits is a desirable public policy objective.

Keywords: information costs; institutional design; instrumental philanthropy; licensure; nonprofit theory (search for similar items in EconPapers)
Date: 2020
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DOI: 10.1515/npf-2019-0050

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